Effect of Health Expenses on Household Capabilities and Resource Allocation in a Rural Commune in Vietnam

PLOS ONE, Forthcoming

11 Pages Posted: 18 Jul 2009 Last revised: 16 Oct 2014

See all articles by Kim Thuy Nguyen

Kim Thuy Nguyen

Yale University - School of Medicine

Oanh Thi Hai Khuat

Institute for Social Development Studies

Steven Ma

Yale University - School of Public Health

Duc Cuong Pham

Institute for Social Development Studies

Giang Thi Hong Khuat

Institute for Social Development Studies

Jennifer Prah Ruger

University of Pennsylvania - School of Social Policy & Practice; University of Pennsylvania - Perelman School of Medicine

Date Written: October 15, 2012

Abstract

Background: Significant health expenses can force households to reduce consumption of items required for daily living and long-term well-being, depriving them of the capability to lead economically stable and healthy lives. Previous studies of out-of-pocket (OOP) and other health expenses have typically characterized them as “catastrophic” in terms of a threshold level or percentage of household income. We aim to re-conceptualize the impact of health expenses on household “flourishing” in terms of “basic capabilities.”

Methods and Findings: We conducted a 2008 survey covering 697 households, on consumption patterns and health treatments for the previous 12 months. We compare consumption patterns between households with and without inpatient treatment, and between households with different levels of outpatient treatment, for the entire study sample as well as among different income quartiles. We find that compared to households without inpatient treatment and with lower levels of outpatient treatment, households with inpatient treatment and higher levels of outpatient treatment reduced investments in basic capabilities, as evidenced by decreased consumption of food, education and production means. The lowest income quartile showed the most significant decrease. No quartile with inpatient or high-level outpatient treatment was immune to reductions.

Conclusions: The effects of health expenses on consumption patterns might well create or exacerbate poverty and poor health, particularly for low income households. We define health expenditures as catastrophic by their reductions of basic capabilities. Health policy should reform the OOP system that causes this economic and social burden.

Keywords: healthcare economics, out-of-pocket payments, Vietnam, poverty

JEL Classification: I11, I18

Suggested Citation

Nguyen, Kim Thuy and Khuat, Oanh Thi Hai and Ma, Shuangge and Pham, Duc Cuong and Khuat, Giang Thi Hong and Prah Ruger, Jennifer, Effect of Health Expenses on Household Capabilities and Resource Allocation in a Rural Commune in Vietnam (October 15, 2012). PLOS ONE, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1435820 or http://dx.doi.org/10.2139/ssrn.1435820

Kim Thuy Nguyen (Contact Author)

Yale University - School of Medicine ( email )

333 Cedar Street
New Haven, CT 06520-8034
United States

Oanh Thi Hai Khuat

Institute for Social Development Studies ( email )

Hanoi
Vietnam

Shuangge Ma

Yale University - School of Public Health ( email )

PO Box 208034
60 College Street
New Haven, CT 06520-8034
United States

Duc Cuong Pham

Institute for Social Development Studies ( email )

Hanoi
Vietnam

Giang Thi Hong Khuat

Institute for Social Development Studies ( email )

Hanoi
Vietnam

Jennifer Prah Ruger

University of Pennsylvania - School of Social Policy & Practice ( email )

3701 Locust Walk
Philadelphia, PA 19104-6214
United States

University of Pennsylvania - Perelman School of Medicine

423 Guardian Drive
Philadelphia, PA 19104
United States